A new Building Act Bill, 2083, registered at the Federal Parliament Secretariat on Asoj 17 (BS), 2083, mandates professional liability insurance for engineers and construction contractors, and proposes strict penalties including license cancellation for professional misconduct.
The bill, introduced by the Ministry of Infrastructure Development, aims to enhance accountability in the construction sector by making individuals and firms fully responsible for technical errors or negligence that lead to accidents or structural weaknesses in buildings.
Mandatory Insurance and Accountability
Under the proposed legislation, individuals or institutions involved in designing or supervising specific categories of buildings must obtain professional liability insurance. Additionally, building owners or construction firms are required to secure ‘construction risk insurance’ to mitigate potential accident risks during the construction process.
The bill introduces stringent provisions for professional or regulatory action. If a designer, contractor, supervisor, evaluator, or any other technical professional involved in building construction fails to comply with building codes or violates professional ethics, local levels or urban development offices will recommend action with evidence.
Such recommendations will be forwarded to the relevant councils, such as the Nepal Engineering Council (NEC), an autonomous government body established on March 11, 1999, to regulate the engineering profession, or other licensing and regulatory bodies, for appropriate action, which can include license cancellation.
Fines, Local Authority, and Housing Support
The proposed bill also introduces increased fines for illegal construction. Building without an approved map could incur a penalty of up to Rs 500,000, while constructing in violation of an approved map could lead to a fine of up to Rs 200,000. These penalties are significantly higher than the previous maximum fine of Rs 50,000 under the old Building Act, 2055.
Local levels are empowered to halt illegal construction, demolish structures, freeze property, and, if necessary, cut off essential services like electricity and water. Furthermore, the bill mandates structural testing for buildings that are 50 years old every five years, and for those over 65 years old every three years.
To support housing for vulnerable citizens, the bill proposes grants of up to Rs 75,000 per household, comprising Rs 50,000 from the federal government and Rs 25,000 from provincial governments. First-time Nepali homeowners who build according to government-specified designs and standards will also receive free river-based and natural construction materials.
Broader Legislative Context and Outlook
In a related development, the Ministry of Infrastructure Development has also registered the ‘Diploma Engineering Council Bill, 2083’ in the House of Representatives, aiming to make licenses mandatory for overseers and further professionalize the construction workforce.
The government’s move to revise the Building Act, 2055, originally enacted on Poush 9 (BS), 2055, addresses uncontrolled urbanization, unsafe construction practices, and a lack of accountability for technical errors. Despite efforts to implement a national building code for earthquake-resistant structures since 2060 (BS), its enforcement has been unsatisfactory, particularly for privately built residential buildings. The current government has declared the ongoing fiscal year as a ‘Law Making and Reform Year’, targeting 166 bill registrations in parliament.
With the ‘Building Act, 2083 Bill’ now registered, it will proceed through the parliamentary process. If the ‘Diploma Engineering Council Bill, 2083’ is passed, overseers will be required to register with the council or pass a licensing examination within one year of the act’s implementation. However, the exact timeline for the parliamentary discussion and passage of the ‘Building Act, 2083 Bill’ remains unclear. Further details regarding the scope of professional liability and construction risk insurance, including coverage limits, premium structures, and designated providers, are yet to be released. The specific identification and roles of “licensing bodies or relevant regulatory bodies” also require further clarification.
